Former Gamecock contract employees suing SouthPeak for not paying up

SouthPeak Interactive has been accused of not paying of debtors as it agreed upon during its purchase of Gamecock in 2008.

According to a former producer for Gamecock, SouthPeak promised former contract employees that their money was "in the mail", but checks have yet to arrive.

"I can think of no reason why my four work-for-hires would not be paid, especially once SouthPeak's lawyer contacted them early on and acknowledged that their invoices were good and would be honored and paid in full," he told Joystiq. "Ever since then, for nearly a year, they have been told a check would be sent very soon. At one point, approximately 8 months ago, they were even told that their checks were in the mail."

Outstanding debuts claimed by individual vendors are various in size, running from $320 to over $3000 and former co-owner of Gamecock, Mike Wilson, says there's no excuse for SouthPeak to be holding out.

"These [invoices] ranged from our testing house, Cyan Worlds, who ended up doing huge layoffs because of non-payment, to the big magazine and website publishers, to the smallest of companies and individuals hired for webwork, video production, packaging, you name it," he said. "800 dollars to 800,000 dollars, they were all given essentially the same treatment.

"All moneys owed and receivables booked were disclosed in detail before the transaction could close, with us and our investors having to sign declaring that this was 'everything'," he said.

SouthPeak's purchase of Gamecock supposedly placed the company financially in the red, and claims state that payments to vendors would prove financially difficult, if not unlikely.

There's loads more over on Joystiq, and it is a rather good read. You should go have a look.